Corporate governance has acquired dimensions larger than usually visualized to facilitate a transformation in the economic and social performance of a country as a whole, says J Narayanamurty, Director JNIDB and Chief General Manager, IDBI.

Traditionally, corporate bodies in India are family-owned companies. It is well-known that these companies are either shy of disclosing or known to disclose as little as possible. Boards constituted for running such companies have become objects of ridicule, and are often dismissed as `dummy' or `rubber stamp' boards, having only one single agenda i.e., protection of the controlling interest of the owners. In view of what usually people thought as `unsalutory linkages with the promoting families' the corporate credibility and professional competence of these boards had become a subject of serious discussion even before the advocates of corporate governance appeared on the scene.

Rapid industrialization, policy changes contemplated in various industrial policy resolutions and finally the onset of reforms, witnessed the emergence of a new board-driven culture with institutions and general public becoming bigger stakeholders than the so called family owners in many companies. Therefore, a demand for a closer scrutiny of corporate business practices and quality of disclosures was beginning to gain momentum.

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